Toronto Rent Report — June 2026

Toronto's rental market continued its notable softening trend through June 2026. Overall average rents dropped to $2,400 per month according to Zumper's June 2026 Toronto rent research — down 3% year-over-year and representing the sharpest correction Toronto's rental market has seen in over a decade.

The Toronto CMA's purpose-built vacancy rate hit 3.0% in CMHC's 2025 Rental Market Survey — the highest reading since before the pandemic — up from 2.5% in 2024. By Q1 2026, vacancy in rent-stabilized buildings completed since 2000 (a segment less protected by Ontario's rent-control regime) reached 5.4%, a five-year high.

Toronto is one of the notable Canadian markets where a combination of slower rent growth and strong wage growth has led to improved affordability — a meaningful shift after years of relentless upward pressure.

Toronto's condo rental market (secondary rental market) shows even sharper year-over-year declines than the purpose-built segment, reflecting the wave of new condo completions.

Purpose-built rental market (Zumper, June 2026)

• Overall average: $2,400 / month
• 1 Bedroom: $2,100 / month
• 2 Bedroom: $2,749 / month

Purpose-built rental (CMHC Oct 2025 turnover vs long-term tenant)

• 1 Bedroom (new tenant): $2,073 / month
• 1 Bedroom (long-term tenant): $1,711 / month

The gap between turnover rents and long-term-tenant rents (approximately $362/month for a 1BR) reflects Ontario's rent-control regime, which limits annual increases on existing tenancies but allows landlords to reset to market on vacancy.

Condo rental market (CMHC Q4 2025)

• 1 Bedroom condo: $2,313 / month · -4.4% YoY
• 2 Bedroom condo: $3,017 / month · -8.3% YoY

Downtown Toronto and the immediate downtown-adjacent neighborhoods continue to command the highest rents, but have seen the sharpest year-over-year declines in the condo segment. Suburban markets and outer neighborhoods have held up better on relative basis.

Premium neighbourhoods

• Downtown / King West / Entertainment District: Prime condo stock, transit hub
• Yorkville / Rosedale: Historically the priciest, boutique buildings
• Liberty Village / CityPlace: Newer condo-heavy neighbourhoods
• Distillery / St. Lawrence: Walkable historic areas

Best-value neighbourhoods

• Scarborough / Malvern: East end, transit-accessible
• North York / Downsview: Mid-city, subway-adjacent
• Rexdale / Weston: West end, budget-friendly
• Etobicoke (outer): Suburban with waterfront access

See CMHC Toronto neighbourhood tables for detailed by-zone rent averages.

Toronto has absorbed a wave of new purpose-built and condo supply. The GTA's purpose-built rental vacancy rate climbed to 3.0% in 2025 from 2.5% the year prior. In the segment of buildings completed since 2000 (less constrained by rent control), vacancy reached 5.4% by Q1 2026 — a five-year high.

New condo deliveries have added significant secondary-rental-market inventory. Combined with slower net migration and higher interest rates suppressing owner-occupier demand, the supply-demand balance has shifted meaningfully.

Concessions on new-build luxury inventory (one to two months free rent) have become standard as institutional operators compete for tenants.

The Toronto rental market appears set for continued gradual softening through the second half of 2026. Wage growth (particularly in tech and financial services) is helping affordability metrics improve for the first time in a decade — but from an extremely stretched starting point.

What this means for renters

• Real negotiating power on condo rentals — sharper declines than purpose-built
• New-build luxury inventory in Downtown / King West is heavily concession-driven
• Suburban markets (Mississauga, Scarborough, North York) offer better value than Downtown
• Ontario rent-control benefit remains real — long-term tenants pay 15-20% less than turnover rates

What this means for landlords

• Condo landlords face the most challenging conditions in the market
• Purpose-built rent-controlled buildings retain pricing power on turnover
• Small concessions accelerate leasing significantly in current conditions
• Existing-tenant retention outperforms turnover economics decisively

SQRFT's July 2026 Toronto report will publish on the last business day of July.